Citigroup significantly cuts its 12-month target prices for Bitcoin and Ethereum, citing that U.S. cryptocurrency legislation setbacks weaken upside catalysts.

Citigroup recently downgraded its target prices for Bitcoin and Ethereum over the next 12 months, indicating that major Wall Street institutions are becoming more cautious about the medium-term outlook for the crypto market. In the report, the bank lowered its Bitcoin target price from $143,000 to $112,000, and its Ethereum target from $4,304 to $3,175. The core reason for this adjustment is that the progress of US crypto legislation has not met expectations, and regulatory catalysts that could have driven market revaluation are being delayed.

Citigroup believes that the slowdown in the US Congress’s efforts to advance the Crypto Market Structure Act is the main reason for the downward revision. The report highlights that the progress of the Clarity Act in the Senate has been hindered, due to disagreements over stablecoin regulations, and the legislative window for actionable laws in 2026 is shrinking. For the market, this means that policies that could improve regulatory clarity, encourage institutional participation, and boost ETF demand are unlikely to materialize in the short term.

Citigroup analyst Alex Saunders stated in the report, “Regulatory catalysts will drive further adoption and capital flows, but the window for US legislative opportunities is narrowing this year.”

In terms of the magnitude of the revision, Citigroup’s outlook for both major crypto assets has become notably more cautious. The new Bitcoin target price is approximately 21.7% lower than the previous estimate, and Ethereum’s is about 26.2% lower. This not only reflects the bank’s lowered expectations for regulatory tailwinds but also indicates that, amid macro uncertainties and policy delays, the market’s medium-term valuation models are being recalibrated.

Bitcoin and Ethereum Still Have Upside Potential, but the Baseline Scenario Has Weakened Despite the downward revisions, Citigroup does not turn outright bearish. Instead, compared to earlier more optimistic expectations, the bank now believes that the upward trajectory of the crypto market over the next year will be more gradual.

More notably, Citigroup presents both pessimistic and optimistic scenarios: in a potential recession, Bitcoin could fall to $58,000, and Ethereum could drop to $1,198. Conversely, in a more optimistic scenario, Bitcoin could reach $165,000, and Ethereum could rise to $4,488. This suggests that Citigroup does not deny a long-term bullish trend but believes that medium-term performance will be more heavily influenced by macroeconomic conditions and regulatory developments.

Ethereum Faces Higher Sensitivity Compared to Bitcoin, Citigroup appears more cautious about Ethereum. The bank believes Ethereum’s future performance will be especially affected by on-chain activity indicators, which depend not only on policy environments but also on actual network engagement. However, Citigroup also notes that trends like stablecoins and tokenization could still support market interest in the Ethereum ecosystem in the future.

The report states, “Ethereum’s metrics for user activity are particularly sensitive, and while these indicators have recently been weak, trends in stablecoins and tokenization could increase interest and usage.”

This also reflects the recent market perception that the two assets are diverging: Bitcoin is still largely viewed as benefiting from macro liquidity and policy expectations, while Ethereum’s value is more susceptible to on-chain activity, application adoption, and ecosystem growth.

From Citigroup’s recent adjustments, ETH still has upside potential, but compared to BTC, its recovery path clearly depends more on fundamentals.

Market May Remain Range-Bound Temporarily Citigroup notes that, until legislative clarity improves, Bitcoin may hover around $70,000. This implies that, although the market has not completely lost its bullish narrative, the lack of new policy catalysts means prices are more likely to digest uncertainty within a range rather than rapidly initiating a new rally.

The report also mentions that if Democrats gain more seats in the November midterm elections, the likelihood of passing crypto legislation could further decrease, as intra-party disagreements over crypto regulation persist. Some proposals aim to restrict officials from profiting from crypto assets and to strengthen anti-money laundering rules. This indicates that Citigroup’s downward revision is not only based on current legislative gridlock but also reflects a forward-looking assessment of political risks.

Wall Street Reassesses Regulatory Tailwinds Citigroup’s significant cuts to Bitcoin and Ethereum targets do not mean it is entirely bearish on the crypto market. Instead, it signals that Wall Street is re-evaluating how much and how quickly regulatory clarity can translate into price catalysts. The market initially hoped that US legislative progress would lead to increased institutional adoption, ETF inflows, and valuation expansion. But with this narrative delayed, asset valuation models are being adjusted downward accordingly.